CSR EXPENDITURE BY CORPORATES FOR FY 2021-22 [BY 31ST MARCH, 2022]

In terms of the Section 135(5) of the Companies Act, 2013, the Companies on which CSR provisions are applicable are required to spend, in every financial year at least two percent (2%) of the average net profits of the company made during the three (3) immediately preceding financial years on CSR activities as specified in Schedule VII of the Act and in pursuance of the CSR Policy of the Company.

Below are the checkpoints for FY 2021-22 CSR activities to be undertaken –

CHECKPOINTS FOR CSR COMMITTEE

1. Monitoring/ Review the CSR Policy of the Company and recommendation of modifications to the same, if any;
2. Recommendation of the budget and amount of expenditure to be incurred on the CSR activities.
3. Recommend to the Board CSR activities, projects, programs to be undertaken by the Company itself or through any specified implementing agencies having unique CSR Registration Number;
4. Formulation and recommendation to the Board, an annual action plan in pursuance of its CSR policy or recommendation of modifications, if any to the existing annual action plan;
5. Annual Action Plan to include:
   • List of CSR Projects approved
   • Manner of execution
   • Modalities of utilization of funds and implementation schedules
   • Monitoring and reporting mechanism
   • Details and need of impact assessment, if any.

CHECKPOINTS FOR BOARD OF DIRECTORS

1. On recommendations of CSR Committee, approve the modifications to the CSR Policy, if any;
2. Approve the budget and amount of expenditure to be incurred on the CSR activities;
3. Approve the annual action plan in pursuance of its CSR policy;
4. The Board shall take into account recommendations of the CSR Committee and provide appropriate instructions / directions to the CSR Committee when required;
5. Ensure that the CSR activities are undertaken by the company in accordance with Schedule VII of the Companies Act, 2013 and CSR Policy of the Company;
6. In case of ongoing project, the Board of a Company shall monitor the implementation of the project with reference to the approved timelines and year-wise allocation and shall be competent to make modifications, if any, for smooth implementation of the project within the overall permissible time period;
7. The Board of a company shall satisfy itself that the funds so disbursed have been utilized for the purposes and in the manner as approved by it and the person responsible for financial management shall certify to the effect.

‘*’ However, in case the company is having CSR Expenditure less than fifty (50) lakh rupees, the functions of CSR Committee may be discharged by the Board of Directors of the company.

OTHER CHECKPOINTS

1. In case, the Company is not able to spend the required amount by 31^ST MARCH, 2022:
   • In case, the unspent amount relates to any ongoing project:
     Transfer such unspent amount by 30th April, 2022 in a special account to be opened by the company in any scheduled bank to be called the “Unspent Corporate Social Responsibility Account” and Such amount shall be spent by the company for its obligation towards CSR within next three (3) financial years.
   • In case, the unspent amount NOT RELATED TO ANY ONGOING PROJECT
     Transfer such unspent amount to a Fund specified in schedule VII, by 30th September, 2022;
     (Note: PMNRF, Swach Bharat Kosh, Clean Ganga Fund, PM CARES are the funds specified under Sch VII)
2. Further, the Companies are also required to disclose the composition of the CSR Committee, CSR Policy and Projects approved by the Board on their website, if any, for public access.

Kindly note that the CSR expenditure is now mandatory and any non-compliance with above provisions results in Stringent Penal Provisions. In view of this, the Companies on which CSR provisions are applicable are required to fulfil its obligation to spend towards its CSR activities/ projects or transfer the required amount to the funds specified in Schedule VII by 31^ST MARCH, 2022 to comply with these provisions.

ANNUAL ACTION PLAN DETAILS

THE LIST OF CSR PROJECTS OR PROGRAMS TO BE UNDERTAKEN IN AREAS OR SUBJECTS SPECIFIED IN SCHEDULE VII OF THE ACT:

IMPLEMENTATION SCHEDULE INCLUDING DETAILS ON FUNDS UTILIZATION

• Funds will be disbursed in phase/tranche wise depending on the nature of the project.
• The CSR budget will be spent on CSR activities which will be approved by the Board on the recommendation of the CSR Committee.
• For certain projects reimbursement model will be followed. The funds will be disbursed after a financial assessment of the expenses incurred. For the remaining projects, the funds will be directly disbursed to partner organizations/ beneficiaries with the approval of the CSR Committee & the Board.

MONITORING AND REPORTING MECHANISM:

• The monitoring mechanism of each project will differ on the basis of the nature of the project.
• Monitoring and reporting shall be done basis the periodic reports/ Annual Reports and utilisation certificates received from Implementing Agency/ies on the Project/Programmes undertaken during the year.

DETAILS OF NEED AND IMPACT ASSESSMENT, IF APPLICABLE
Impact assessment is mandatory for companies with a CSR budget of INR 10 crore or more in any fiscal year and all projects with outlays of INR 1 crore or more. Impact assessments will be conducted as per applicability.